1 Carbon Capture and Storage (CCS) in the United States: The Challenges Ahead Carbon Capture and Storage (CCS) in the United States: The Challenges Ahead.

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Presentation on theme: "1 Carbon Capture and Storage (CCS) in the United States: The Challenges Ahead Carbon Capture and Storage (CCS) in the United States: The Challenges Ahead."— Presentation transcript:

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1 Carbon Capture and Storage (CCS) in the United States: The Challenges Ahead Carbon Capture and Storage (CCS) in the United States: The Challenges Ahead Presentation to North American Energy Standards Board Houston, Texas June 23, 2010 Robert W. Gee, President Gee Strategies Group, LLC

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6 Can CCS become commercial in the United States? Yes, provided that challenges can be overcome: Well-Recognized Challenges CO 2 emissions reductions have value with reasonable certainty Costs are below the value of the reductions Storage is proven in a range of geologies An adequate legal-regulatory framework is in place The public supports CCS A Less-Understood Challenge Viable business models must be implemented for the full value chain CaptureTransportStorage

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10 Bluewave Resources/ Gee Strategies Group Current Project Objectives and Process Objectives Create a roadmap that points to opportunities and solutions. Consider how CCS-related business models mesh or clash; and Identify critical business issues that cut across the industries. Ongoing Process Individual Interviews Facilitated Group Discussions Supporting Analyses

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12 Priority Issues for CCS Businesses RankQuestion 1How do we move from RD&D incentives to commercial investment? 2Would a commercial entity be willing to do storage? 2How do we address public acceptance? 4What should be the role, if any, of economic regulation across value chain? 5Can we learn from similar experiences in other industries or countries? 6Should we move from individual projects to networks? 7EOR or saline formations: Where should the emphasis be? 8Would a commercial entity be willing to do transportation?

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13 Various industry structures have been proposed. These include several types of stand-alone project and network structures. Companies along value chain are evaluating business models for prospective industry structures. –How do these mesh or clash? Much is as yet uncertain. –Timing and value of CO 2 reduction requirements –Evolution of the technology –Role of economic regulation Industry structure will vary by region and change over time.

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19 Should we move from individual projects to networks? Initial CCS projects will have: - One source, - One storage reservoir - A dedicated pipeline. As CCS expands, there may be advantages to sharing resources to develop regional networks. Fleet A Fleet B

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21 Would a commercial entity be willing to transport CO 2 ? Is there a viable business model to incentivize capital formation? - How will this be financed? Who should perform this service? How will it be regulated? - By Whom? New infrastructure is required for CO 2 transport: How real is this as a near-term business opportunity? Source: NETL

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24 CCS will need to meet many standards for… Safe operation of capture, transport and storage facilities. Storage capacity estimates Risk assessment Site selection and permitting Monitoring, Verification and Accounting (MVA). –Monitoring of the injection and storage –Verification of performance –Accounting for CO 2 emissions reduction incentives (e.g., cap-and-trade) CO 2 quality for pipeline transport and injection into storage Site closure and post-closure stewardship These standards and who will set them has mostly yet to be decided... Could it be NAESB?